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Bermuda: New health care plan proposed and new maternity - paternity leave law

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December 12, 2019

The proposals would establish a new minimum benefit package and improve access to preventive care and disease management.

Employer Action Code: Monitor

Currently all health insurance products within Bermuda are required to provide a minimum package of benefits and health care services: the Standard Health Benefit (SHB) that primarily covers inpatient and outpatient hospital care. In practice, multinationals and large, local companies provide comprehensive health insurance plans purchased from local insurance companies, which include the mandated SHB as well as supplemental coverages and services. However, about 8% of the population is uninsured and another 10% to 12% is underinsured (i.e., those covered via the Bermuda government’s Health Insurance Plan [HIP]). At the same time, overall health care spending has risen from 7.6% of GDP in 2008 to 11.5% in 2017 according to the Bermuda Health Council, which oversees the system. In nominal terms, annual spending is about BMD 11,300 per person (the Bermudian dollar is pegged to the U.S. dollar at a 1:1 ratio).

In response to these and other pressures such as an aging population, the Ministry of Health has unveiled a reform package that would, among other things, establish the BHP (Bermuda Health Plan) as a new minimum benefit package, create a unified health financing system, and improve access to preventive care and disease management. The proposal is currently subject to public consultations, which may impact the reforms, but the broad outline is as follows.

Key Details

  • The BHP would supplant the SHB as the basic minimum benefit package and would cover a wider range of care, including prescription drugs (up to BMD 400 per year, currently not covered by HIP), consultations with general practitioners and specialists, chronic disease management, basic dental care, vision care and maternity coverage.
  • Primary care would be arranged based on the capitatation model (prepayment per enrollee or on a per member per month basis) and patient copayments rather than the current fee-for-service reimbursement model. The maximum coverage for visits with a specialist would be BMD 200 per consultation plus a BMD 50 copayment, subject to a maximum of four consultations per year.
  • The HIP and related Future Care plans would remain in operation, but certain elements of the plans would be subject to the minimum standards established by the BHP, which is intended eventually to form the basis for a single unified risk pool for essential care. With time, the coverage options offered by HIP and Future Care would be gradually integrated in the BHP plan.
  • Estimated BHP premiums would be BMD 514 per month for adults and BMD 178 for children compared with BMD 355 for the SHB package.
  • There would be no change to the role of service providers or the ability of patients to select a physician.

The government has also passed legislation to increase paid maternity leave from eight to 13 weeks and to provide a paid paternity leave entitlement of five days for the first time, effective January 1, 2020. In both cases, employees must have at least 12 months of service to be eligible for paid leave.

Employer Implications

The proposals have encountered some significant opposition due to their sweeping nature. In addition, some elements such as the BMD 400 per year limit on prescription drug coverage and copays for overseas care under the BHP are popularly seen as inadequate (especially for seniors). The government has indicated it aims to pass the legislation in the first half of 2020 and launch the BHP in the third quarter of 2020. Assuming the plans are approved, employers in Bermuda will need to review the new system and options for supplemental coverage. In theory, better access to preventive care, disease management and a single risk pool for financing essential care should help control costs and result in better health outcomes, but achievement of those goals will depend in large part on the final shape of the legislation and process of implementation.

Employers should review their family leave policies to ensure they are in compliance with the new statutory minimums.

Authors

Michael Brough

London


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